Conlon Enterprises reports the following information about resources. Cost Driver Rate Cost Driver Volume Resources used Setups $ 370 per run 425 runs Clerical 50 per page 2,500 pages typed Resources supplied Setups $ 160,450 Clerical 133,400 Sales revenue totaled $315,000. Required: a. Prepare a traditional income statement. b. Prepare an activity-based income statement

Conlon Enterprises reports the following information about resources. Cost Driver Rate Cost Driver Volume Resources used Setups $ 370 per run 425 runs Clerical 50 per page 2,500 pages typed Resources supplied Setups $ 160,450 Clerical 133,400 Sales revenue totaled $315,000. Required: a. Prepare a traditional income statement. b. Prepare an activity-based income statement

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Home * CengageNOWv2 | Online teachin x +. takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&inprogress=false eBook Show Me How E Print Item Flexible Budget for Selling and Administrative Expenses for a Service Company Digital Solutions Inc. uses flexible budgets that are based on the following data: Sales commissions 8% of sales Advertising expense 15% of sales Miscellaneous administrative expense $10,000 per month plus 4% of sales Office salaries expense $50,000 per month Customer support expenses $20,000 per month plus 30% of sales Research and development expense $75,000 per month Prepare a flexible selling and administrative expenses budget for October for sales volumes of $500,000, $750,000, and $1,000,000. (Use Exhibit 5 as a model.) Digital Solutions Inc. Flexible Selling and Administrative Expenses Budget For the Month Ending October 31 Total sales $500,000 $750.000 $1,000,000 Variable cost: Sales commissions Advertising expense Miscellaneous…
Exercise 7-7 (Static) First-Stage Allocations [LO7-2] The operations vice president of Security Home Bank has been interested in investigating the efficiency of the bank's operations. She has been particularly concerned about the costs of handling routine transactions at the bank and would like to compare these costs at the bank's various branches. If the branches with the most efficient operations can be identified, their methods can be studied and then replicated elsewhere. While the bank maintains meticulous records of wages and other costs, there has been no attempt thus far to show how those costs are related to the various services provided by the bank. The operations vice president has asked your help in conducting an activity-based costing study of bank operations. In particular, she would like to know the cost of opening an account, the cost of processing deposits and withdrawals, and the cost of processing other customer transactions. The Westfield branch of Security Home…
Original costs Proportion of Administrative hours used Proportion of Information Systems hours used Proportion of Maintenance hours used (a) Total costs Administrative Institutional $77,000 0.20 Operating Segments 0.10 Support Departments Information Systems Maintenance $110,600 $62,000 0.10 Retail 0.10 0.10 0.10 Operating Segments Institutional Retail $649,000 $351,000 0.45 0.40 Determine the total costs that each operating segment would be accountable for if support costs are allocated using the direct method. (Round interme 0.30 0.35 0.30 0.50
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Colby Company makes cases for cell phones of all sizes and types for sale through specialty retailers. The company makes a standard model for the most recent iPhone as well as a deluxe model. Management has designed an ABC system with the following activity cost pools and activity rates for these models: Activity Rates Activity Cost Pool Supporting manufacturing $2 per direct labour-hour $27 per order Order processing Customer service. $68 per customer Management would like an analysis of the profitability of a particular customer, Cell City, which has ordered the following products over the last 12 months: Standard Model Deluxe Model 95 Number of cases 270 Number of orders Direct labour-hours per case. 5 0.25 47 2 0.40 67 Selling price per case $ $ $ 27 Direct materials cost per case $ 24 The company's direct labour rate is $28 per hour. Required: Using the company's ABC system, compute the customer margin of Cell City. Customer margin
1. Compute an activity rate for each activity using activity-based costing.
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Assume a company's activity-based costing system includes three activities with the following activity rates: Activity Cost Pool Activity Rate Travel $ 2 per mile driven Deliveries $ 50 per delivery Customer service $ 22 per phone call Two of the company's many customers include Customer A and Customer B. These two customers consumed the company's activities as follows: Total Expected Activity Customer A Customer B Travel (number of miles driven) 300 250 Deliveries (number of deliveries) 15 5 Customer service (number of phone calls) 20 12 If the company earned $1,130 in revenue serving Customer B, then what is the customer margin for this customer? Multiple Choice $96 $156 $116 $136
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The following data have been extracted from the records of Puzzle Incorporated: Production level, in units Variable costs Fixed costs Mixed costs Total costs Required A Required B Required: a. Calculate the missing costs. b. Calculate the cost formula for mixed cost using the high-low method. c. Calculate the total cost that would be incurred for the production of 12,880 units. d. Identify the two key cost behavior assumptions made in the calculation of your answer to part c. Required C Production level, in units Variable costs Fixed costs Mixed costs Total costs Complete this question by entering your answers in the tabs below. Calculate the missing costs. Note: Do not round intermediate calculations. February 9,200 $ 19,320 ? 16,312 $ 71,532 February 9,200 $ 19,320 $ 2 X 16,312 $ 71,532 Required D August August 20, 240 $? 35,900 ? $ 106,970 Answer is not complete. 20,240 34,255 35,900 52,475 $ 106,970

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	Cost Driver Rate	Cost Driver Volume
Resources used
Setups	$	370	per run	425	runs
Clerical		50	per page	2,500	pages typed
Resources supplied
Setups	$	160,450
Clerical		133,400